“You say your plant uses robots?” he asks.
“In a couple of departments, yes,” I say.
“Have they really increased productivity at your plant?”
“Sure they have,” I say. “We had—what?” I scan the ceiling for the figure. “I think it was a thirty-six percent improvement in one area.”
“Really . . . thirty-six percent?” asks Jonah. “So your company is making thirty-six percent more money from your plant just from installing some robots? Incredible.”
I can’t hold back a smile. “Well . . . no,” I say. “We all wish it were that easy! But it’s a lot more complicated than that. See, it was just in one department that we had a thirty-six percent improvement.”
Jonah looks at his cigar, then extinguishes it in the ashtray.
“Then you didn’t really increase productivity,” he says. I feel my smile freeze. “I’m not sure I understand,” I say.
Jonah leans forward conspiratorially and says, “Let me ask you something—just between us: Was your plant able to ship even one more product per day as a result of what happened in the department where you installed the robots?”
I mumble, “Well, I’d have to check the numbers...”
“Did you fire anybody?” he asks.
I lean back, looking at him. What the hell does he mean by that? “You mean did we lay anybody off? Because we installed the robots?” I say. “No, we have an understanding with our union that nobody will be laid off because of productivity improvement. We shifted the people to other jobs. Of course, when there’s a business downturn, we lay people off.”
“But the robots themselves didn’t reduce your plant’s people expense,” he says.
“No,” I admit.
“Then, tell me, did your inventories go down?” asks Jonah.
“Hey, Jonah, what is this?” I say to him.
“Just tell me,” he says. “Did inventories go down?”
“Offhand, I have to say I don’t think so. But I’d really have to check the numbers.”
“Check your numbers if you’d like,” says Jonah. “But if your inventories haven’t gone down . . . and your employee expense was not reduced . . . and if your company isn’t selling more products—which obviously it can’t, if you’re not shipping more of them—then you can’t tell me these robots increased your plant’s productivity
Extract from The Goal: A Process of Ongoing Improvement by Eliyahu M. Goldratt.
This quote got me thinking through the whole weekend, how many times we say "we're being productive" or "we're optimizing for sake of producitivty"...